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New Business Model for console

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Which combination of console price and gaming price would you prefer?

399 USD console; 60 USD game 11 47.83%
 
599 USD console; 40 USD game 12 52.17%
 
Total:23

What would you say if Sony or MS decided that for next gen they will opt to not charge royalties from the devs. That would mean that the multiplatform would have to sell for 20 bucks less than the version on the competitor. And to keep the same profit they would raise the price of the console itself (so they make profit from HW and subscription, but not from royalties on the third party games)?

In this scenario let's use PS4 as analysis case.

Console launched for 399 and AAA (and most retail games anyway) launch for 60 bucks. We have about 10-12 attach ratio so in royalties each console sold would receive about 200 USD.

This way we would had PS4 launching for 599,99 USD (only 100 more expensive than X1 at the time) but assured that all games would release for 40 or under (including first party), let's keep the subs price untouched at the moment.

Would you support this Business Model? Do you think it would sell more consoles or less (it really is a comparison of upfront payment, fixed cost and "present value", but let's say for the sake of comparison the total cost would be similar to average customer)?

I myself prefer to have higher upfront with lower fixed costs, because I'll be sure I have the money for the upfront payment and then will use a lower fixed cost (which is easier to manage and also to increase the flexibility on finances). Also this could even diminish a little second hand market since entry price for the games will be lower. I know that higher tag for the console itself will be a barrier for many and I suspect it would have a bad effect overall even if I would prefer this model.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

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Why no choice of 499 USD console; 50 to 60 USD game ?



I see the poll is missing the option for "The idea Sony/MS make $20 from 3rd party games is BS, and the idea 3rd parties would pass on such savings to consumers is next level BS".



Why not just leave it the way it is now?



Expect prices only to increase for both games and consoles.



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I would pay 80 bucks a game as long as it is complete and full of quality content, with zero micro transactions.



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Nah, give me a cheaper console and keep game prices the way they are now. I’d take that option for a Nintendo console, because their games hold their value insanely long. MicroSony though, a month or two after launch you can find their games for $30-40. And the same for all third party games. It just isn’t a big enough deal imho to save money on games.

Especially when the publishers aren’t going to just charge less anyway. You think EA or Ubisoft or Activision are suddenly going to charge $40 just because MicroSony doesn’t want a cut? They’ll charge $60 because we’re used to paying $60.



HollyGamer said:
Why no choice of 499 USD console; 50 to 60 USD game ?

Give me hot or give me cold, don't give me warm =p

mutantsushi said:
I see the poll is missing the option for "The idea Sony/MS make $20 from 3rd party games is BS, and the idea 3rd parties would pass on such savings to consumers is next level BS".

I guess you missed the part where the platform holder would determine/force the price difference due to no royalty.

jason1637 said:
Why not just leave it the way it is now?

That is an option you have on the pool. Basically asking if you would prefer paying more for the HW and less for the SW.

LudicrousSpeed said:
Nah, give me a cheaper console and keep game prices the way they are now. I’d take that option for a Nintendo console, because their games hold their value insanely long. MicroSony though, a month or two after launch you can find their games for $30-40. And the same for all third party games. It just isn’t a big enough deal imho to save money on games.

Especially when the publishers aren’t going to just charge less anyway. You think EA or Ubisoft or Activision are suddenly going to charge $40 just because MicroSony doesn’t want a cut? They’ll charge $60 because we’re used to paying $60.

Seems like you also missed the enforcement. And also that it isn't saying if it really is feasible or not, but if you would like it and how do you think it would affect sales.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

"would have to sell for 20 bucks less than the version on the competitor"

Nope. They could do that and still make the same profit.... but they certainly wouldn't have to. They'd probably just continue selling at the same price and enjoy the extra profit they make instead of passing the savings onto consumers. That's what businesses usually do. I mean, just look at Steam! I think they charge 30%, yet despite console games having to pay console royalties and a % to retailers for physical copies too (which probably adds up to more than Steam alone charge), new games are often listed at a higher price on Steam than they are on console.



Bet Shiken that COD would outsell Battlefield in 2018. http://gamrconnect.vgchartz.com/post.php?id=8749702

Cheaper console. An affordable entry cost is super important. The problem with cheaper games, are those who aren't buying 10-12 games. For all the buyers who are only going to get 5 or 6 games over the lifetime of the console, if that, they aren't going to buy the more expensive unit on the shelf, even if they know the games are cheaper than the competitions. Many won't know that though.

If they want to try something like this, they could go with $499 and $50 for games, which will work if the competition also does $499, but keeps games at $60. I really don't see much point in this if you're PS though. MS could try this but PS doesn't have to.



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